2023 Q3 UK Technology M&A Snapshot

10 Oct 2023

Summers are quieter in M&A. This year was no different, despite the soggy weather. The biggest headwind though (to continue the weather analogy) was the fall in US bond markets, reveals ICON's UK Tech M&A Snapshot Q3 2023. Although inflation is falling, it is still high and investors now believe rates will have to stay 'higher for longer'. As a result, rates are at 20-year highs and longer dated bond yields are over 100bp higher than 6m ago. Investors no longer expect significant rate cuts ahead, dampening the big US tech rally.

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2023 Mid Year UK Technology M&A Snapshot

11 Jul 2023

Although 383 deals in the first half of 2023 is down on the 21/22 boom years, it is actually pretty comparable with pre-COVID numbers and looks increasingly like the 'new normal', reveals ICON's UK Tech M&A Snapshot Mid Year 2023. Near-zero interest rates had fuelled a wave of private equity-funded buyers. But these rates don’t look like returning any time soon with inflation looking sticky, particularly in the UK. There is, however, still lots of activity across both the software and services spaces.

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Q1 2023 UK Technology M&A Snapshot

13 Apr 2023

The last few years have seen record levels of Tech M&A in The UK, driven by currency depreciation and near-zero interest rates which fuelled a wave of private equity-funded buyers. Both rates and currency cycles have reversed in 2023, dampening buyer enthusiasm in the wider M&A market. Yet, Q1 2023 was another busy quarter in Tech with over 200 deals completed. That is of course lower than the last two years, but remains in line with pre-pandemic numbers. With zero rates unlikely to be seen again anytime soon, this may represent the ‘new normal’.

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Digital Transformation Services (DTxS) February 2023

21 Feb 2023

Over 2500 deals worth $377bn in total value have been completed in the DTxS sector since 2021. Deal activity remained strong as enterprise Digital Transformation initiatives led to strategic and financial buyers pursuing capabilities across the services sector. This was particularly true with strategics as acquisitions cut across traditional boundaries in consulting, IT services and software. M&A multiples remain elevated despite public market headwinds, illustrating the continued interest in high-quality assets to help buyers move up the value chain.

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2022 Full Year UK Technology M&A Snapshot

17 Jan 2023

Surprisingly, the number of UK tech M&A deals in 2022 was the second highest on record. Despite the global pandemic, war in Ukraine, falling equities, the highest inflation in 40 years, supply chain gridlock and a jump in interest rates, 972 deals were announced. While the number of deals was down -9% compared with 2021, impressively it was up 9% compared with 2019 (pre-COVID). Smaller and mid-cap deals proved particularly resilient.

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2022-23 ICON AI & DataTech Atlas

01 Nov 2022

The AI & DataTech sector is proving more resilient than the overall software industry. Fundraisings are setting new records and premium M&A deals are still closing. However, challenges do remain and understanding the intricacies of this crowded and complex sector is more important now than any other time in the past decade. ICON’s AI & DataTech Atlas report supports financial & strategic investors and acquirers and the startups themselves in best understanding the DataTech sector at a macro level and where financial and corporate development opportunities exist.

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Q3 2022 ICON Cybersecurity Sector Update

12 Oct 2022

The cybersecurity sector is leading the way for M&A and fundraising activity in 2022, with deal activity for Q1-Q3 up 60% compared to 2020 for M&A and +22% for fundraising. The sector is proving recession-proof and remains a vital growth area, defying current troubling macroeconomic headwinds. Enterprises recognise that they must continue investing in cyber defences to protect against an increasingly sophisticated threat landscape, regardless, and as a result of the significant geopolitical and economic uncertainty. This in turn continues to drive M&A and fundraising deal activity. ICON’s report investigates the fundamentals behind why this is the case.

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H1 2022 UK Technology M&A Snapshot

18 Jul 2022

Despite stronger headwinds - as inflation and interest rates rise - demand for deals remains strong. In 1H22 deal volumes were 6% up on 2019 (pre COVID), and only 6% lower than 2021 (which was a huge record year). Surprisingly, deal volumes in Q2 were higher than Q1; so they show little evidence of slowing down. Deal valuations remain punchy, down just 8%. With sterling weak and lots of PE cash, we remain cautiously optimistic about Tech M&A. We have had a very busy first half and have a healthy deal pipeline at ICON. So, it’s very much business as usual.

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